Unit 3 : Introduction to Consumer Behaviour

In Unit 1, you studied about the marketing concept that emphasized the importance of
the customer. Customer needs and wants should form the beginning of all product
design and marketing activities. For this it is essential for marketers to understand
consumer behaviour. Session I of this Unit highlights the importance of studying
consumer behaviour and describes the stages in the typical consumer decision making
process. Session II describes the different types of buyer behaviour and the
participants in the purchase decision.
Session I
Meaning and Defining Consumer Behavior and its Scope
Meaning
Consumer behavior refers to all the processes related to why, how, when, from whom
consumers purchase and pay for a product and how they consume and dispose of it
in order to meet their needs.
Definition
The process whereby individuals decide whether, what, when, where, how and from
whom to purchase goods and services. as defined by Professors Walter and Paul.
Scope
The scope of consumer behaviour is very broad. It starts from the point where a
consumer experiences a need which can be fulfilled by a product.
It includes the decisions and activities involved in the purchase of a specific product
alternative.
It encompasses all the factors that influence the process of consumer need
recognition, choice of alternative and product consumption. These factors include
cultural factors (e.g. food and dress habits, customs and rituals),
social factors (e.g. family and friends),
personal factors (e.g. consumer age and occupation),
psychological factors (e.g. consumer personality, motives, attitudes etc.) and
marketing activities.
It ends only after the consumer has used and disposed of the product.
Figure 2.1 depicts an overview of the factors that influence consumer behaviour.

Socio-Cultural Influences
Family, Friends, Sub-Culture,
Culture

Purchase Decision Making Process

Need Recognition
Information Search
Consumer Personal Factors
e.g. Age, Marital Status,
Family size, Income
Occupation

Evaluation of Alternatives

Activities by Marketers
Product, Price, Distribution, Advertising
and other Promotion

Purchase
Post Purchase Behaviour

Consumer Psychological Factors

e.g. Personality,Motives

Figure 2.1: Scope of Consumer Behaviour

Importance of Studying Consumer Behaviour
Studying consumer behaviour can help marketers make better decisions about their
marketing programmes.
The following are some of the benefits of understanding consumer behaviour for
marketers:
1.Understanding the needs and the motives: underlying consumer purchases
can help marketers design better products.
Having knowledge of the features and benefits consumers look for in a product will
enable manufacturers to build in these attributes and benefits in to their brands.
For example for consumers who want a bathing soap that fights germs,
manufacturers offer brands such as Lifebuoy soap and Dettol soap. For consumers
who are looking for a soap which is gentle on the skin, manufacturers offer soaps
such as Dove and Pears . Similarly for the cost conscious car-owner there is the
Maruti 800, Alto and other hatchback car models such as the Hyundai Santro and
Maruti Swift. On the other hand for customers looking for luxury cars with more
powerful engines, there are car models such as Toyota Corolla and Honda
Volkswagen Vento.
Product packaging is also influenced by the knowledge of consumer behaviour.
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Several brands of shampoo have been able to add greatly to their sales by launching
the Rs.1 or Rs. 2 shampoo sachet after they realized that many cost conscious
consumers want to use quality products but are unwilling to spend a large amount
at one time on shampoo bottles.
2. Knowing when and where consumers buy products: enables marketers to make
the product available at the right place and time.
The key to the survival and success of many fast-moving consumer goods such as cold
drinks, bread, salt and soap is wide availability because marketers have understood
that if a particular brand is not available then consumers will easily take a substitute
rather than go searching for a specific brand.
On the other hand, for high-end luxury products limited distribution is possible and in
fact adds to the exclusive image of the brand. With the increase in internet penetration
in India and greater consumer confidence about purchasing online, many marketers
are ensuring that their products can be purchased through the online mode.
3. An understanding of the role that different individuals play in the purchase
process : can help design better promotional programmes such as advertisement and
personal selling and aim them at the right people.
For example the manufacturers of milk additives (such as Bournvita, Maltova and
Horlicks) address their advertising and sales promotion campaigns to both mothers
and children, since the former are the buyers of the product category and the latter
are the users.
The yes pls attempt is to persuade the mothers by highlighting the nutritional value of
the product. while attracting children to the brand through good taste and
associations with cartoon characters and celebrities.
4. A knowledge of the sources of information that various consumers are exposed
to or use to know about the product: can help marketers ensure that information
about the product is available to their target consumer in the appropriate media.
Thus products for which the decision makers are women will be advertised in womens
magazines or TV programmes watched by women. Expensive luxury watches will be
advertised in glossy magazines read by business executives.
5. Pricing decisions also need to be based on an understanding of consumer
behaviour: Pricing cannot be a mechanical process based only on cost of the product
and desired profit margin.
Pricing is a complex task and must also take in to account the value that consumers
place on the product as well as competitors offerings.
Mobile phone manufacturers such as Nokia, Samsung and Micromax have phones
available at various price points in India. These manufacturers want to cater to the
customers who would like a low-priced phone with the minimum features as well as
the customers who want the latest features and are willing to pay for them.
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6. The study of consumer behavior takes us to the roots of why a consumer has
positive or negative predisposition?
7. Comprehending consumer needs, expectations and aspirations coupled with
problems is a must to exploit marketing opportunities and meeting the challenges
beset along with the opportunities.
Summary : Thus, consumer behavior is the case of micro behavior as well as macro
behavior. CB encompasses all the efforts, explain all the acts of choice either at a
given time or over a period of time.
Major questions involved in CB :
What are the products they buy? >>
Why they buy them ?
How they buy them ?
>>
When they buy them ?
Where they buy them ?
>>
How often they buy them ?
Who is important in the buying decisions?
Success Story : Procter and Gamble states : Our business is based on
understanding the consumer and providing the kind of products that the consumer
wants. We place enormous emphasis on our product development area and our
marketing area, and on our people knowing the consumer.
Why to study CB :
1) Buyers reactions to a firms marketing strategy have great impact on the firms
success.
2) The proof of establishing consumer orientation in the marketing concept of the
firm depends on how marketing mix is developed to include positive answers to
the questions listed above.
3) By gaining a better understanding of the factors that affect buyer behavior,
marketers are in a better position to predict how consumers will respond to
marketing strategies.
4) CB helps in selection and segmentation of the target markets.
5) Devising an appropriate marketing strategy most relevant to the target market
segment.
6) Evaluation of marketing programmes, strategies and tactics.
7) Assessing the trends of change and preparing marketing plans to suit future
changes.
8) Finally, a consumer is the principal a priori of business.

Major contributors to the field of CB :

1) Howard-Sheth 2) Englel-Kollat-Blackwell and 3) Nicosia.
Important Note :
Four Os in Marketing and
Organization

Prodcut Mix
Brand
Package
Service

Objects

Operation

Price

Channels
Intermediaries
Transportation
Location
Territories

Organisati
on

Price
Allowances
Credit Terms
Discounts

Objectives

Product

Place / Physical
Distribution

Advertising
Personal
Selling
Sales
Promotion
Publicity

Promotion